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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1642 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HIGH TECHNOLOGY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature recognizes that research and development is the core of innovation. Without innovation, there is no technology industry, and the subsequent growth of our economy is stunted with the lack of new products, services, or processes. During the research and development stage, ideas and theories are tested to determine feasibility. With an increasingly interconnected and competitive global economy, fostering and encouraging innovation are essential to creating new jobs in high-tech and traditional sectors.
In recent years, innovation has led to new jobs in many different sectors as diverse as defense/dual-use, software/information technology, life sciences/biotechnology, and clean energy. At the same time, innovations ripple through the economy, creating jobs for workers through the development of an advanced infrastructure, such as clean energy solutions, broadband networks, and new devices and products in the service industries such as healthcare and tourism.
The current law parallels enhancements tailored to Hawaii's unique position and the Internal Revenue Code, providing support for scientific experimentation at twenty per cent of the cost of the qualified research. The program cost to the State averaged about $11,000,000 per year over the last nine years, and in 2006, the program provided funding to over four hundred companies. This tax credit has been a great source of support for local companies, especially to research and development companies that are still in the start-up stages.
The purpose of this Act is to extend the income tax credit for qualified research activities for an additional five years and place an annual aggregate cap on the tax credit.
SECTION 2. Section 235-110.91, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (c) to read:
"(c) There shall be allowed to each
qualified high technology business subject to the tax imposed by this chapter
an income tax credit for qualified research activities equal to the credit for
research activities provided by section 41 of the Internal Revenue Code and as
modified by this section[.], up to an annual maximum of $ of
credits in the aggregate for all qualified taxpayers. The credit shall be
deductible from the taxpayer's net income tax liability, if any, imposed by
this chapter for the taxable year in which the credit is properly claimed."
2. By amending subsection (j) to read:
"(j) This section shall not apply to
taxable years beginning after December 31, [2010.] 2015."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall effect on July 1, 2112.
Report Title:
High Technology; Research Tax Credit; Aggregate Cap
Description:
Extends the income tax credit for qualified research activities for five years and places an annual aggregate cap on the tax credit. Effective July 1, 2112. (HB1642 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.